Question

Goodluck Ltd. invited applications for issuing 80,000 shares of ₹10 each at a premium of ₹5 per share. The amount was payable as follows:

On Application	₹5 (including premium ₹3)
On Allotment	₹7 (including premium ₹2)
On First and Final Call	₹3

Applications were received for 1,00,000 shares and pro-rata allotment was made to all the applicants. All calls were made and were duly received except allotment and first and final call from Vidya who was allotted 3,200 shares. Her shares were forfeited.

Amount Credited to Share Forfeiture Account will be:

Options

• ₹4,000

• ₹10,400

• ₹20,000

• ₹13,600

Answer 1

₹10,400

Explanation:

Shares applied by Vidya `= 3200xx100000/80000 = 4000`

Excess Application money received = 4,000 − 3,200 = 800 Shares × ₹5 = ₹4,000

Allotment money due from Vidya = 3,200 × ₹7	22,400
Less: Excess received on application	(4,000)
Allotment money not received	18,400

Entry for Forfeiture:

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c (3,200 × ₹10)     ...Dr.		32,000
	Securities Premium A/c (3,200 × ₹2)     ...Dr.		6,400
	To Share Allotment A/c			18,400
	To Share First and Final Call A/c			9,600
	To Share Forfeiture A/c			10,400